Shop Talk

Retailers, consumers and prices

Check Out Line: Young professionals trimming turkey-time travel, spending


turkey1Check out a survey showing that younger U.S. consumers are trimming travel plans as well as turkeys during Thanksgiving.
More young professionals (37 percent) are adjusting their Thanksgiving travel and spending plans than the affluent and general population (both 30 percent), according to a survey by American Express. Young professionals are defined as less than 30 years old, having a college degree and a minimum annual household income of $50,000.
The young guns also are pulling back in other areas:
* 11 percent of young professionals plan to drive instead of flying, compared to 7 percent of the general population and 6 percent of the affluent, who are defined as having a minimum annual household income of $100,000. 
* 8 percent of young pros plan to shorten their stay for the Thanksgiving holiday weekend, compared to the affluent and general population (both 3 percent). 
* 7 percent of young pros will use rewards points, miles and special offers to offset the cost, versus 4 percent of the affluent and 3 percent of the general population.
Overall, American Express found 30 percent of U.S. consumers plan to adjust this year’s travel plans for Thanksgiving — historically one of the busiest travel days of the year — but only 21 percent expect those expenses to decline from last year.
Those who are changing their plans said they will rely more on travel by car, stay for a shorter time and cash in rewards to help pay for holiday trips as they become more selective amid the high unemployment and soft housing market.

However, in a positive sign, sales at U.S. retailers excluding vehicle sales rose for the second straight month in September, raising cautious optimism consumer spending could support the economic recovery.
The American Express survey also showed that the young professionals are cutting back for Halloween, when consumers spent $5.8 billion last year according to the National Retail Federation.
* 36 percent of young pros are buying less expensive costumes and decorations.  The rate is 16 percent among the affluent group and 15 percent among the general population. 

* 26 percent of young pros are making their own costumes or using hand-me-downs.  Again, that is higher than the 13 percent of affluent respondents and 11 percent of the general population. 
Looking ahead to the winter holiday season, sale prices are still king when it comes to early shoppers.  Eighty-two percent overall said they would be enticed by some sort of discount, with almost all of the young professionals (96 percent) and affluent (94 percent) agreeing.
It appears easier to entice the young set.  They would be willing to spend with discounts as low as 10 percent, according to American Express.  The affluent said it would take a discount of nearly 30 percent, on average, for them to buy. 
Also in the basket:

Pepsi, Anheuser to jointly buy goods, services

Kraft opens $50 mln Russian biscuit factory

Host Hotels beats estimates on cost cuts

Diageo’s Q1 sales dip 6 pct, sending shares lower 

Handbags and snoods help Burberry top forecasts

(Reuters photo)

J.C. Penney discounts go mobile


jcpenneyJ.C. Penney discounts are going mobile as the department store takes aim at younger, tech-savvy shoppers.

Just in time for the crucial holiday shopping season, the company is testing a discount program from Cellfire that will allow Penney’s Houston-area shoppers to use their cell phones to download coupons that can be presented at checkout for savings.

Wider aisles? Cleaner stores? Must be Wal-Mart’s Project Impact


walmartelectronicsWal-Mart has a plan to keep shoppers coming into its discount stores once the economy improves and it is called ”Project Impact.”

While the retailer lost customers during the boom years as shoppers spent their dollars in the brighter, cleaner stores of its competitors, Wal-Mart is trying to make sure that doesn’t happen again.

Check Out Line: No discounts? no customers


Check out Abercrombie & Fitch’s falling profits.


The company played a remix of “Cold as Ice” as hold music for its conference call with analysts. It’s hard to tell if it is supposed to be ironic, or if the company is just tone deaf. 
The latter could be possible, as Abercrombie has decided to tune out consumer’s expectations that retailers will offer discounts to try to get them in the door.
In November, CEO Mike Jeffries said the short-term relief provided by promotions would have the affect of damaging the brand in the long term.  He defended the strategy again on Friday, though the company has cut some prices at its Hollister and abercrombie chains.
But if people stop going to your store, do they eventually forget about your brand?
Abercrombie’s same-store sales fell 25 percent in the key fourth quarter. Of course, refusing to discount (other than on clearance items) protects profits. Or maybe not. Net income fell 68 percent, though some of the decline was related to a new employment agreement for the CEO.
Also in the basket:
PepsiCo Q4 profit falls, but matches Wall St view
Sears launching online service to connect clients, contractors (Chicago Tribune)
Starbucks to sell instant coffee
Microsoft to open own stores, take on Apple

Check Out Line: Shoppers resist last-minute urges


Check Out low shopper turnout just before Christmas.RETAIL-BLACKFRIDAY/

Only 38.7 percent of consumers in a survey were out for some last-minute holiday shopping in the weekend before Christmas — the smallest number in six years, according to the survey conducted by America’s Research Group and UBS.

Traffic was especially weak in the U.S. Northeast and Midwest, which were slammed by winter storms over the weekend. That kept scores of people at home, but those who did venture out seemed to opt for stores that had deep discounts going on.  Wal-Mart Stores, the world’s largest retailer, attracted over two-thirds of consumers, the survey found.

Toys “R” Us touts Black Friday discounts to shoppers


Take as long as you need to recover from that big Thanksgiving meal this year.

This Black Friday, Toys “R” Us is holding an additional hour of door-buster deals  as it tries to get a bigger bite of sales this holiday season.

The specialty toy retailer is discounting more than 150 items this year, compared to the 101 that it announced a year ago. Shoppers can snap up toys and games at those special prices from 5 a.m. to 1 p.m. on Nov. 28, known in the retail industry as Black Friday, the traditional kick-off to the holiday shopping season. Last year, the door-buster deals were finished by noon.

Sam’s Club tries luring new members with $10 deal


sams.jpgWal-Mart is betting $10 and 10 weeks will draw new members to its Sam’s Club warehouses.

Sam’s Club and Costco work as membership clubs. Shoppers pay an annual fee that allows them to shop in the warehouses and get discounts on everything from diamond rings and big screen TVs, to bulk-sized packages of toilet paper or bottled water.

The bodegas are coming! The bodegas are coming!


tgtbodegaoutside2.JPGThe drink cooler is lined with linens. The fridge is stocked with jeans. The soup cans don designer labels.

It’s Target‘s take on the local New York City bodega as the discount retailer prepares to open four “Bullseye Bodegas” in Manhattan.